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30 september 2016

Concrete proposals from the French Banking Federation for successfully funding the energy transition

The cost of funding the energy transition remains a major challenge. To accelerate funding in this field, the FBF has made a proposal called "the green supporting factor" to assist in funding the energy transition.

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French banks have long rallied in support of the green economy, in France and elsewhere. For the French Banking Federation (FBF), the COP21 conference was an opportunity to publicise the key role they are playing in funding the energy transition.

As part of the Responsible Finance Week (26 September to 2 October 2016) being sponsored by the French Ministry of the Environment, Energy and the Sea, Philippe Brassac, FBF Chairman, spoke at the launch conference alongside Ségolène Royal, Minister of the Environment, Energy and the Sea. He described French banks' solid commitments to making France a champion of green growth. French banks are global players in this field, with acknowledged expertise, particularly in green bonds.

And yet, the cost of funding the energy transition remains a major challenge. To accelerate funding in this field, the FBF has made a proposal called "the green supporting factor" to assist in funding the energy transition. It has three components:

On the regulatory front, FBF wants to highlight "a suitable prudential treatment" of energy transition financing and investment. This should lower the capital requirement for financing and investing in these assets.

Asset eligibility would be based on the terminology of the Climate Bond Initiative, the label 'Energy and Environmental Transition for Climate (TEEC) or any other recognized label with the same characteristics.

All economic agents would be eligible, including individuals who buy an environmentally friendly vehicle, SMEs that finance an energy-efficient building, companies that raise funds to build solar or wind power infrastructure, and so on.

On this occasion, Marie-Anne Barbat-Layani said, "Our green supporting factor proposal would help speed up funding of the energy transition in France and Europe. For France this would also be an opportunity to step up its role in funding green growth on the eve of COP22."